Volkswagen Group has been making big strides after 2015’s “Dieselgate” scandal, both in the marketplace and public opinion, but Porsche is making things difficult. Earlier this month, the VW subsidiary was hit with its own $600 million diesel emissions fine. Now, CEO Oliver Blume is reportedly under criminal investigation.
The reason: Blume, along with others at Porsche, may have approved “disproportionate” payments to a Porsche works council member, the prosecutor’s office of Stuttgart, Germany, said Tuesday, according to Reuters. In doing this, the managers may have misused corporate funds, breaching fiduciary trust, which could be a criminal offense, reports German newspaper Stuttgarter Nachrichten.
But that’s not all. A broader probe is also underway involving tax inspectors, as a Stuttgart business audit official may have passed on confidential information to staff at Porsche “and accepted benefits in exchange,” according to another prosecutor statement via European English-language news site The Local.
Other details are scarce at the moment, but the investigation is well underway. On Tuesday, Porsche headquarters in Stuttgart were raided by prosecutors, including the offices of Blume, chief financial officer Lutz Meschke, and HR chief Andreas Haffner, according to Car and Driver.
How severe is this accusation? As Reuters writes, “A severe breach of fiduciary trust for potential misuse of funds is a criminal offence and can carry a penalty of up to 10 years in jail.”
People may have forgotten Dieselgate in a few years, but it’s harder to shake a scandal when you’ve got a CEO in jail.
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